The Views of a Donor

Public procurement reform hurts. It touches vested interests, but improves the lives of individuals. I once visited a university hospital with the full apparatus to carry out open heart surgery, but with no sterilizing unit working. Rubber gloves were not thrown away, but washed with tap water, because replacements were never stocked. There was little chance to carry out heart surgery successfully. Infections spread quickly to all hospital patients. That situation was possible because purchasing decisions were taken by chief surgeons, who did not listen to the nurses and staff in charge of washing rubber gloves. None of these surgeons knew that the surgery instruments they were using were not sterilized.

With public procurement reform, this decision-making process would have to change. More users would be involved in the needs assessment process. For example, in our hospital, a choice would have to be made between high-tech equipment that benefits a happy few, and basic equipment which benefits all patients. While reform cannot solve the question of priorities, it can, by bringing transparency, help the decision-making process.

Reform requires salary scale adjustments. If you ever visit warehouses-be they of a hospital, a Ministry of Health or a Public Works Ministry-you will quickly realize the fortunes which go daily through the hands of poorly paid staff. Warehouse staff have enormous responsibilities: to distribute the right items to the right users at the right time, to protect items from degradation or theft, and to inform buyers about stock levels. Their salary levels should reflect this.

A purchaser knows months in advance what is needed, and the temptation to make an arrangement with a local supplier is enormous. As in the case of warehouse staff, this is an open invitation to corruption. Since procurement represents anything between 40-60% of a government's budget, you can gauge the extent of possible malpractice.

Today, no governments are in a financial situation to release money or authorize spending whenever necessary. Money allocated to government departments is often released irregularly, due to irregular revenue. Departments then give priority to staff wages, and procurement comes second. This is human and understandable. But too often, goods are purchased at the last minute using emergency procedures, which do not require open bidding.

For donors, public procurement reform hurts too. Too often, the reforms proposed are ignored. The reports are put in a drawer, with no decision taken. We sincerely and strongly want that to change. We would like governments which request technical assistance for public procurement reform to take it seriously; to discuss with the experts; to consider their recommendations; to take decisions.

This hard labour can bring fruits. In January 1998, OECD's Development Aid Committee met with Ministers of Planning and Development Co-operation of six countries. The DAC sought the views of developing countries on the way we donors work with our partners. One view was that donors should provide less project aid and more programme and budget aid. We understand that your governments prefer budget aid to the financing of projects, which sometimes are not well- coordinated with other donor activities or with your own activities. However, our administrations are submitted to control from our Parliaments, which want to know exactly how ODA money has been spent and whether it has reached its target. If we can assure our Parliaments that your public procurement and your accounting procedures are perfect, it will allow us to provide more budget aid.

Another request was to untie our aid. Among pre-conditions for successful untying being discussed at OECD is the building partners' procurement capacities and meeting requisite standards on efficiency and probity. I quote from an OECD document: "More untied aid must go hand-in-hand with efforts in partner countries to strengthen their procurement regimes and capacities...".

Based on edited excerpts of a keynote speech delivered by Ms. Robert at the conference.